Many petroleum rich states have abysmally poor human rights records, little or no popular sovereignty, and great inequality. (1) Teodoro Obiang, who has ruled Equatorial Guinea since 1979, is alleged to have amassed a fortune of 600 Million USD. His country, which touts the highest GDP per capita on the continent, nevertheless posts child mortality rates and life expectancies well-below the Africa average. The House of Saud claims the right to rule Saudi Arabia, and is recognized as the legitimate government, unchallenged by the international community, even as human rights violations continue against women and minorities. Exxon Mobil and its partner Australian oil companies have collaborated with local partners to exploit Papua New Guinea's petrochemical reserves, a country which suffers from endemic violence, rebellion in its oil producing regions, and poverty, even if it nominally remains a democracy. Nigeria, another nominal democracy, remains a country rife with corruption. A low-scale insurgency against a corrupt central government has continued in the Nigerian delta for many years, while Boko Haram has taken over large portions of the north. During his reign from 1993 to 1998, General Sani Abacha was accused of taking 2.2 Billion USD in state funds during his presidency, even as oil flowed from Nigeria to the global market through pipelines and refineries built in large part by Western companies. In Sudan, President Omar al-Bashir, in addition to being indicted for committing crimes against humanity in Darfur, has been accused by the ICC Prosecutor of taking 9 billion USD in oil revenues from state coffers.
It is against this background that Leif Wenar develops an argument for his proposed Clean Trade Act--a legislative mechanism that can be enacted in developed countries to prevent the unjust enrichment of despots in the developing world through the sale of developing countries' natural resources. In the first sections of Blood Oil, Leif Wenar surveys the legal regime governing the extraction and sale of natural resources in the developing world. He then argues that the exploitation of those resources often occurs under conditions of profound injustice, rewarding those governments who seize power by force and lack democratic credentials. Wenar, using as a backdrop the violence brought about by resource exploitation in the developing world, proposes moving away from the doctrine of effective control of governments over territory as the defining criteria for the legitimacy of transactions to the doctrine of popular sovereignty. Wenar's attack centres on the disparity between the ownership of natural resources, which putatively under international law belongs to peoples, (2) and the exercise of the right to dispose of those resources, which under international law generally belongs to the government exercising effective control over the territory of the state, however that government arrived in power. (3) Taking a novel approach, Wenar advocates for moving towards an approach, borrowed from private international law, which places public policy constraints on the acquisition of, transfer, and trade in foreign resource wealth as opposed, to a somewhat more conventional approach, of changing the public international law rules for the recognition of governments (e.g. to require that only governments of a democratic character be recognised for the purposes of disposing of a nation's resource wealth).
Wenar's proposal is that governments must not allow their nationals to trade in foreign resources unless four conditions in the country of origin are met. (4) These are that the foreign populations whose resources are being sold must be able to consent to the transaction, by having appropriate information (1) to judge how resources are spent, that they be sufficiently independent (2) to have said to have been properly deliberated (3) on the distribution of that wealth, and that dissent (4) from proposed transactions be tolerated within civil society in those states. (5) These four principles form the backbone of his proposed Clean Trade Policy, under which individual states would pass laws forbidding the trade in resources where the standards are not met. (6) States that adopt such laws would also work with civil society organisations to develop clean trade standards, and policies that govern the trade in resources (including policies of verification-mirroring those that occurred during the Kimberley Process).
In our paper, we draw on the proposed changes in Section IV of Wenar's book to theorise how activists interested in bringing about these changes might utilise the existing features of international law to adopt Wenar's proposals. We begin with Jessup's description of transnational law, (7) as a description not of a particular legal field, but as a method of understanding the interaction of public, private, national and international legal regimes, and the process of norm creation and enforcement outside states. (8) We argue that activists interested in taking up Wenar's challenge to reform the ownership and distribution of global commodities would do to move beyond Wenar's narrow public law framework, and study the myriad forms of regulation and interactions that define the contemporary transformation of political sovereignty and rule-making under the conditions of globalisation. (9)
Although Wenar borrows his proposed Clean Trade Policy from private law, our method aims to bring to light the public law assumptions of Wenar's theory, which allows us to show that the proposed rules he develops are mired in a much more complex regulatory net than he himself assumes. Rather than understanding issues of social justice as governing relationships between peoples and states, (10) we argue that resource policy is embedded in transnational governance orders, in supply chains which mix regional and global markets, in transnational corporations that operate amongst multiple legal systems, and in a myriad of other structures in an internationally pluralist regime. Activists interested in bringing Wenar's proposals to life would do well to adapt to the pluralism of contemporary international law. Only by effectively exploiting these structures could such a regime come into existence. It is not enough that Clean Trade Laws are passed in developed nations. These laws must be enforced not just by international organisations, but by transnational civil society, including transnational public spheres, public-private partnerships, and NGOs. In our paper, we draw on historic examples to flesh out the details of how this might work.
A Post-Westphalian World?
Wenar argues that the end of colonization played a key role with respect to the ability of states to dispose of their property. Decolonised people's rights to dispose their natural wealth was affirmed by the two Covenants and several GA resolutions, (11) and has achieved the status of codified custom. (12) Nevertheless, the right to permanent sovereignty over natural resources does not mean that individuals or even peoples enjoy that right but rather that the right belongs to governments with effective control over the national territory. (13) This is not a highly controversial proposition, as it flows from the idea that a government, having duly established a right to rule over its territory, can dispose of the natural wealth of a country. Moreover, it affirms the international law principle that other states should not interfere in the internal affairs of other states by setting conditions for which governments they will allow to engage in trade and commerce.
The problem with state control over natural resources is that leaders could abscond with the natural resource wealth of their nations. Wenar proposes so solve the problem by having Western states enact laws that would prevent nationals and corporations of democratic states from engaging in trade with nations that violate fundamental human rights. The proposal, which he terms the Clean Trade Act, would make popular sovereignty over natural resources a prerequisite for engaging in trade. (14) Wenar's proposed Act would make it illegal to purchase resources from disqualified countries and impose penalties on individuals and corporations who make purchases or facilitating imports from disqualified countries would obtain. (15) To designate a country as disqualified, Wenar suggests that we could use Freedom House metrics (or some other metric) to determine the moment at which countries would be subject to these sanctions. (16)
The Act, if implemented by, e.g. the United States, would go beyond making it illegal to trade directly with disqualified countries as it could also deny the use of commercial and financial facilities in the United States to vendors of a disqualified country's resources, deny the entry of regime members and elites from disqualified countries, prevent the purchase of real estate or other property in the United States by those individuals, deny the sales of domestic goods and services
(including financial services, such as the ability to list companies on US stock exchanges, or the investment in the United States by the wealth funds of disqualified nations) to disqualified countries and their nationals (perhaps making a suitable exemption for humanitarian goods), deny access to US courts for those individuals, and render any existing contracts unenforceable, as a matter of public policy. Effectively, Wenar is suggesting not extending comity to the internal rules of other states with respect to determinations of the ownership of natural resources, tax monies, etc. with respect to the refusal to enforce contracts. (17)
To illustrate, the United States could simply designate Obiang a person from whom Americans do not have the right to buy Equatorial Guinea's oil, or to enter lease agreements. (18) This would have the effect of depriving him revenues from the United States and make it...